The continuing research in our laboratory aims to better understand the nature of the biochemical regulation in proliferating and differentiating cells of the normal and abnormal epidermis. In pursuit of this goal, we have followed two major problems; the epidermal chalone, an endogeneous cell inhibitor, and the mechanism of intracellular stimulation resulting from epidermal stripping. With special attention to the use of epidermal tissue as a source, epidermal aqueous extracts were prepared from several experimental sources. Epidermal extract from cow-snout, new-born hairless mice and adult hairless mice were all found to be active in inhibiting H3-6- thymidine incorporation into both epidermal and dermal DNA. After several stages of extract purification were carried out with an active preparation, the activity of the final fraction unfortunately was short-lived. The final fraction lost its activity in less than a month after preparation. In vivo experiments with hairless mice quantitated the extent of stimulation resulting from mild stripping in which stratum corneum remains intact after two scotch-tape strippings. At time intervals of 1-72 hours following stripping, thymidine was injected, the pulse ended 1 hour later, and the mouse skin analysed. The results indicate stimulation of epidermal DNA synthesis to be maximum between 12-24 hours and 48-54 hours. No stimulation of dermal DNA synthesis was observed. However, in another group of experiments in which the incorporation of injected thymidine is for intervals of 2 to 72 hours, the cumulative DNA synthesis reflects dermal stimulation in addition to the expected stimulation of epidermal DNA. Integration of results obtained from present studies may suggest how endogenous inhibitor (chalone) and endogenous stimulator (from stripping or wounding) achieve their normal interrelationship, how and what occurs when this normalcy is disrupted and how the epidermis can be returned to its normal function.